RIM’s new CEO could license BlackBerry software to rival vendors

RIM's new CEO says he won't rule out the potential of licensing BlackBerry …

Research In Motion rose to prominence (and domination of the smartphone market) by controlling both the hardware and software used in its phones, but the company now finds itself behind Apple's iPhone and Google's Android mobile operating system. Looking up at its competitors, RIM sees two models: Apple's, which is very much like its own, and Google's, which licenses the Android software to a variety of hardware makers.

RIM has been in turmoil as of late, losing 75 percent of its stock value in the past year. The company also suffered market share losses, an embarrassing service outage, disappointing sales of its PlayBook tablet, delays in bringing out new software, and rumors that it's an acquisition target. While RIM seems unlikely to ever regain its top position in the smartphone market, some observers have argued that licensing BlackBerry software could help it maintain relevance.

An analyst at the Jefferies & Co. investment firm sees "RIM likely agreeing to license Blackberry 10 to Samsung, HTC, and possibly others. This would help create a critical mass for the ecosystem and maintain RIM’s monthly service revenue; however, it puts more pressure on the hardware business in the short term. Longer term, it possibly gets people hooked on the RIM ecosystem and may in fact allow them to sell more BB 10 handsets (if they are able to create compelling handsets)."

New CEO, new strategy?

That quote was from the beginning of January. On Sunday night, RIM's longtime co-CEOs Mike Lazaridis and Jim Balsillie stepped down to make way for new CEO Thorsten Heins, previously chief operating officer. At that time, Heins promptly revealed that he is open to licensing the BlackBerry software to competing hardware makers, but made no firm commitment.

"Referring to other handset manufacturers using Android that have seen poor financial results as Google’s Android spreads, Mr. Heins said that it makes sense for the company to continue to develop its own software platform," a report in the Globe and Mail stated. "But he stressed that he would be open to talking with other handset makers about licensing RIM’s own QNX-based BlackBerry 10 software."

Allowing other hardware makers to sell phones based on BlackBerry software would be a big change in strategy. RIM says it is committed to its own software, even though it has taken steps to integrate Android apps into its own devices.

“I think it’s that unwillingness to sacrifice our long term value for short term gain,” Lazaridis said. “That’s why we didn’t choose Android. That’s why we decided to build the future on QNX.”

Although Heins said "[w]e didn't stand still in the last 18 months, we did our homework," the industry is still waiting for BlackBerry 10, which will work across phones and tablets. In an interview with the New York Times, Heins said BlackBerry 10 is incomplete but will be ready before the year's end—which could be any time in the next 11 months.

“Would we have loved BlackBerry 10 to be out earlier?” Heins said. “Yes, sure. But we had to manage a very, very challenging situation where we need to continue our growth based on the existing BlackBerry platform and we had to transition the company. I can’t tell you how much effort, hard work it is to architecture a new platform, build it and bring it to market within 18 months’ time.”

RIM aiming for a top-three position in smartphone market

In a video posted to YouTube, Heins said his goal is for RIM to be one of the top three players in the worldwide wireless market. That would require moving past Symbian's market share and staying ahead of Windows Phone. "At the very core of RIM is our innovation," he said. "We always think ahead, we always think forward, sometimes we think the unthinkable."

But the pace of innovation at Apple's and Google's smartphone operating system development teams have clearly outstripped RIM's. Perhaps offloading some device manufacturing responsibility to hardware vendors would help RIM focus on becoming a better software maker, and get more appealing devices on the market.

Heins said not to expect any "seismic change" in RIM's strategy. Whether RIM decides to license its OS or stick only with its own hardware, the company will have to dramatically improve the software to compete in the consumer market against Apple and Google. RIM also must deliver on its core propositions of excellent security and management to enterprise customers, who are increasingly seeing use of iPhones and Androids in the workplace. RIM is starting to do this by offering mobile device management software for Android and iOS. With the likes of Microsoft pushing cross-platform mobile management tools, this step was necessary for RIM to hold its position in the market for business-focused mobile management tools.

With 70 million subscribers, RIM is still a company with a large customer base. But as the new CEO, Heins will have his work cut out for him in both the consumer and enterprise markets. Licensing BlackBerry software is one option. But no matter who makes the hardware, RIM must move faster in bringing out a next-generation mobile operating system.

Would we have loved BlackBerry 10 to be out earlier?” Heins said. “Yes, sure. But we had to manage a very, very challenging situation where we need to continue our growth based on the existing BlackBerry platform and we had to transition the company. I can’t tell you how much effort, hard work it is to architecture a new platform, build it and bring it to market within 18 months’ time.

I would say near impossible to do it in 18 months and have a comparable feature set to existing mobile OS offerings from competitors... then once you get there you have a near zero ecosystem of apps and third-party developers.

Then factor in the competitors will advance during this time (still happening rapidly) both in OS capabilities and "could" backends all while their existing app/developer ecosystem will continue to grown and advance. I just don't see a compelling play for RIM given the time horizons they are talking about...

We once developed for BB but have stopped given the thrash of operating system direction and poor returns on investment compared to what we get from Android and iOS. I would love to be surprised and have another competitor pushing the market forward but speaking as a developer it would take strong usage numbers (and growth trajectory) to get us to consider developing for a third mobile platform (still on the sidelines with WinPhone as well).

RIM looks to be in Microsoft's position with Windows Mobile/Phone, where if Microsoft was a company purely in the mobile market they'd be out of business right now. And reinventing themselves was a pretty damaging experience, late to market and after getting to market adoption has been slow, regardless of how big their user base once was.

To get what RIM really wants out of this deal they're going to need a partnership like Nokia. Otherwise they won't get particularly unique hardware and sitting side by side with Android devices it'll look the same, cost slightly more and won't run much software. Which is pretty much the worst situation RIM could be in.

I'd say RIM would have been better doing the opposite. Port BBM and whatever else to Android and sell their own handsets. That way they don't have this development problem anymore, they still get to sell unique handsets and everyone gets an Android device, but instead of the crappy Motoblur skin on top it's a decent BBM one. However it's probably way too late to start on this, it's something that had to happen a while ago, and I doubt that it's as easy to keep secure.

Sometime in the next year? So that means if this all works out we could start seeing BBOS 10 on Samsung phones in 20 months. If they time it right, they could announce it right after the iPhone 5 sells 100 million.

I think that was what people loved (past tense) about BlackBerry. But that was before the iPhone and Android devices took over the market. The only thing I like about the BlackBerry Curve I have to use for work is that it lasts for days on a single charge meaning it can go unloved for quite awhile (like a three day weekend) and still work. My Android phone is usually dead in a day or two.

Everyone always thinks software is easy, but history has shown building a coherent OS is extremely hard. It sounds like RIM is saying, "Oh we'll do the software because that the easy part," when it is exactly in this area that RIM has had trouble executing. As much as the Nokia move was odd, they did play to their corporate strengths (hardware). Building a team that can do the software is not something one does overnight, and RIM has not shown they have the in-house coding and management skills to deliver on time and on mark.

Gave up my BB recently and am so glad that I did. What a complete piece of garbage compared to its replacement. When the CEO tells you "reset the BB by removing the battery" in a public statement, you know they aren't serious about the stability of their devices.

The only thing I miss is their unique ability to do UMA calling, but after a while that capability is irrelevant.

Why would any other phone vendor even be interested in tying their reputation into RIMM's proprietary communications network? When that network goes down the device is useless. RIMM can't even figure out why their shit doesn't work!

I absolutely loath the OS on my Blackberry. It's by far the weakest element of their product. Why on Earth would anyone want to license that? I could see other companies wanting to license compatibility with BES, maybe. That could be kind of cool. Let me use an Android or iOS device with all the backend crap our IT department demands, and already owns. But I can't fathom anyone seeing their OS as something worth paying specifically for.

Wow, licensing out their software to other hardware makers because they believe that their software is what really keeps them district from being, say, an Android clone maker? Aside from that not being logical, there's the great example of Apple licensing out MacOS to other PowerPC hardware makers to show how well that should monetize. Oh yeah, that was during the 'Apple almost died' days, maybe not the best example to follow. And all that on top of the question of who exactly is salivating over having Blackberry OS on a RIM clone device.

HP can afford to give away WebOS because they make money selling computers, printers and servers.Google can give away Android because they are an advertising company, and it provides a good platform for their ads.Microsoft still makes tons of money from Windows and Office, so they don't need Win Phone 7 to be an immediate success.

But RIM cannot afford to license BBX, because selling phones is their main source of income. No one is going to pay big buck to licence an OS with minimal developer support, and Samsung devices running BBX would just cannibalize RIM device sales.

RIM's only hope here is to try and strike a middle ground between Apple and Google. If they can deliver most of the ease of use of iOS with most of the openness of Android, they just might still be around and prospering in a few years.

RIM is dead. Everybody knows it. I think even RIM knows it. But they still have lots of customers, and revenue. They'll stick around for another 10 years or so, slowly losing customers.

And then as the end is near, they'll sue Microsoft and Apple and Google for patent infringment, in the hopes that one of them will buy the remains of the company and the patent portfolio that comes with it.

RIM makes a good OS. The QNX stuff is grand. RIM can't make a physical handset to save it's soul, and it's marketing department was chisled out of a stone tablet in a bygone era.

Let HTC or Samsung manufacture phones with BB10 on it, and you'll see RIM marketshare skyrocket. but the crutsy old farts at RIM won't be cranking out anything anybody wants from it's own factories anytime soon.

Far be it for me to defend RIM, but the 'software' they're talking about will be QNX-based, not the old Blackberry cruft. (Whether they can add enough value with their messaging framework to make it interesting is a different matter.)

One sentiment that comes up repeatedly is that RIM should give up on phones (they're likely too far behind) and instead become a service provider for messaging and all that other corporate stuff. While this would be a huge blow to RIM's ego, it might be all they have left if they can't keep their investors happy.

Nope. Handset design and marketing are. The OS is actually quite good. Better in a lot of ways than Android. Remember that someone like Samsung or HTC could cheerily replace the UI on the OS with minimal effort. They are quite good at that sort of thing. Then you would have a good OS that is married quite closely with the hardware and performs well.

Sadly, I'm sure that RIM thought about this and discarded it, deciding that they'd make more profit from an OS they build from the ground up. Sorry, not going to happen. I adore my Bold 9700's hardware and I'm not amused to think about my next phone purchasing experience. I'm going to have to pick either BBX and hardware I like, or a useful OS and a silly touch-keyboard phone. Android on BB hardware would have been ideal.

RIM doesn't get it, because it doesn't look at its USERS. BBM is the only thing that keeps consumers using a Blackberry and once you take a deep look at alternative phones, you quickly realize that as cool as BBM is, it isn't worth it when you consider what you give up in other features.

I dumped Blackberry last year after a long love affair and addiction with it, but the move to an HTC Incredible was huge. I agonized for a month or so before making the switch, all because of BBM.

Would it be cool if BBM came to android? I don't really care anymore. A year ago I would of payed $5 a month for the service, now, I don't care about BBM.

Blackberry's heyday was a world where webkit did not exist on a mobile platform and text messaging was not prevalent. Push email was the only reason people ever wanted Blackberrys.

But Push Email is a feature, not a product.

It was destined to be a short run. It's not clear that people even want push email anymore; text messaging has largely replaced that. BES is reportedly frustrating to setup and maintain. The only thing Blackberry has going for it is its brand equity, which has been bleeding out over failures of the RIM network and failures of the playbook.

I got a Playbook when they dropped the price during Black Friday. QNX works fine. (Big drawback is the ability to play flash means you see a lot of adverts. ;-) ) With Android Player, it can use Android apps. Good enough for me.

I don't like Google spying on me. Hell if I will use a Google OS on my phone. If there is a company I hate more than Google, it is Apple. I can't stand Itunes and Apple's attitude. That leaves Windows phone or Blackberry. I'm on my 4th Blackberry and will probably buy another when BB 10 is released. It will have to support UMA. I would never buy a phone without UMA. BTW UMA is not unique to Blackberry.

Note that battery pulls are a thing of the past. Common on BB 4. Less common on BB5. Thus far no pulls required on BB 6. I don't have BB 7 so I can't comment.

"Four days into BlackBerry outages, Research in Motion CEO Mike Lazaridis today said in a press conference that "all the services are back up globally." The outage was the worst in the company's history, Lazaridis said, noting that RIM had been operating at 99.97% uptime over the past 18 months. If customers still experience delays, it may be due to the BlackBerry systems working through a message backlog. Customers may also try pulling the battery out and restarting the phone to re-connect to RIM systems."

I got a Playbook when they dropped the price during Black Friday. QNX works fine. (Big drawback is the ability to play flash means you see a lot of adverts. ;-) ) With Android Player, it can use Android apps. Good enough for me.

I don't like Google spying on me. Hell if I will use a Google OS on my phone. If there is a company I hate more than Google, it is Apple. I can't stand Itunes and Apple's attitude. That leaves Windows phone or Blackberry. I'm on my 4th Blackberry and will probably buy another when BB 10 is released. It will have to support UMA. I would never buy a phone without UMA. BTW UMA is not unique to Blackberry.

Note that battery pulls are a thing of the past. Common on BB 4. Less common on BB5. Thus far no pulls required on BB 6. I don't have BB 7 so I can't comment.

I have to pull the battery out of both blackberries to get things working again every so often. Including getting the Camera software to work on my wife's Torch. Both BB 6.

This is exactly the opposite of what they should do, they need to drop BlackBerry OS and pick up Android. Blackberries can come with a Blackberry themed skin like HTC's sense that includes BBM. That way they can get all the apps people want and RIM can sell all the hardware they like (because that's where they make money).

RIM needs to port BlackBerry Messenger to iOS and Android, at the very least. BBM is probably the best thing they've got going and is the ONLY thing I miss about my old BlackBerry phone. I'd be willing to pay a modest fee to have BBM on my Android. I haven't found a comparable messaging platform for Android yet. Kix has some of the features I want (message delivered/read status), but is still not nearly as good as BBM.

We still don't much about the final BB10 so I can't get behind it being "good" yet. QNX is mostly low-level aspects of the OS and yes it is nice. The problem is what RIM is building on top of that and how it will compare feature wise with other mobile OS competitors both in terms of customer and developer features.

...and that is even before getting to what devices would be running this.

If BB10 turns out to be a compelling OS it may make sense for them to license it assuming they could do it at a price point that hardware vendors would be interested in picking up... then RIM would have to readjust itself for lower revenues given they would likely sell fewer devices and the price per unit for the BB10 license would need to be low priced.

We still don't much about the final BB10 so I can't get behind it being "good" yet. QNX is mostly low-level aspects of the OS and yes it is nice. The problem is what RIM is building on top of that and how it will compare feature wise with other mobile OS competitors both in terms of customer and developer features.

...and that is even before getting to what devices would be running this.

If BB10 turns out to be a compelling OS it may make sense for them to license it assuming they could do it at a price point that hardware vendors would be interested in picking up... then RIM would have to readjust itself for lower revenues given they would likely sell fewer devices and the price per unit for the BB10 license would need to be low priced.

Fair to say, but UIs can always be replaced. The OS itself is good stuff - from a technical persepctive at least. The "present it to the user" has been where RIM falls down.